In Spite Of A Plummeting Luxury Housing Market, One 'luxury Suburb' Stands Out

With the economy turning on its head amid record inflation and high interest rates, as well as a volatile stock market, the U.S. luxury housing market has suffered a dramatic decline after booming under the pandemic housing frenzy.

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Redfin reported on March 10 that luxury home sales slumped nearly 45% over the previous three months, falling nearly 45% from the same period of time. This slump outpaced the record decline of 37.5% of nonluxury properties. A luxury house, according to Redfin, is one that is estimated to be worth in the top 5% of the market.

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There are a number of metros on the East Coast that have been hardest hit along with high-end markets in California, including Miami and Los Angeles. In Miami, luxury sales declined by almost 69% year over year, the greatest decline Redfin has ever recorded in those three months. The next three metros, Nassau County-Suffolk County in New York, were Riverside (-59.8%), Anaheim (-59.3%) and San Jose (-59%) in California.

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The decline in the luxury housing market has been attributed to a number of factors, including economic uncertainty, according to real estate professionals.

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Alin Glogovicean, one of the top real estate agents at Redfin Premier, explained in a prepared statement that uncertainty is largely responsible for the slowdown in the luxury market in Los Angeles. It is important to be certain that a property will hold its value when you invest millions in it. Most luxury buyers and sellers are thinking, ‘Let's wait and see how the market is doing. Once it stabilizes, we'll be ready to go.' Everyone seems to be at a standstill right now.

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Located in Utah's 'luxury suburbs'

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Despite the nation's economic downturn, there are some areas - and some types of luxury homes - that are at least partially bucking the trend.

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There are also resort towns in Utah like Park City, which exploded in popularity after the 2002 Winter Olympics, as well as a famous film festival that takes place annually in Park City, which is known as the "luxury suburb" of Utah.

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Park City has been experiencing a drop in home sales over the past several years due to economic headwinds, however it has not had as many of a negative impact as other upscale markets in this country. It is reported by the Park City multiple listing service that the number of properties sold in the area has dropped almost 30%, from 2,790 in 2021 to 1,962 in 2022, and the average sold price has gone up almost 10%, from over $1.7 million in 2021 to over $1.9 million in 2022.

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In the Park City area and throughout Utah, Summit Sotheby's International Realty, which specializes in luxury real estate, has a very unique luxury market, said Thomas Wright, CEO and principal broker.

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The Wasatch Front has traditionally had a limited availability of luxury homes for sale except in Park City. But Wright said the luxury home market is rapidly growing along with Utah's economy, and migration patterns from other states have increased the number of buyers interested in these types of properties.